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TMI Blog2024 (10) TMI 250X X X X Extracts X X X X X X X X Extracts X X X X ..... not at all discussed these arguments in its order and has simply gone away by observing that the assessee had failed to submit necessary documentary evidence, which in our view, is not correct for the reason that there is corresponding increase in revenue from operations as well as profits of the impugned year and hence without appreciating this aspect the ad hoc disallowances are legally not permissible. Therefore, we restore this matter to the AO for deciding afresh considering all the main and alternative arguments of the assessee. Non Consideration of returned income by AO - AO despite the directions of Ld DRP has not considered the returned income and has considered the income determined while processing the return of income u/s 143(1 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e as under : 4.1 The assessee is a company engaged in the business of providing computer software development and Information Technology Enabled Services (ITES) to its Associated Enterprise (AE), the Assessing Officer referred the matter to the Transfer Pricing Officer (TPO)/A.O. The TPO vide its order dt. 30.07.2021 made certain adjustments to the returned income of the assessee and thereafter draft assessment order has been passed by the Assessing Officer on 16.09.2021. Aggrieved with the draft assessment order, the assessee filed its objections before the Dispute Resolution Panel (DRP) and assailed the order of TPO/A.O. The learned DRP vide its order dt. 15.06.2022 partly affirmed the order of TPO. Following the direction of DRP the AO p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... No.95/Hyd/2022 order dated 09.09.2024. 8. The Ld. DR relied upon the orders of authorities below in respect of the issue involved in Ground No.7. Here it is relevant to mention that the assessee had fairly conceded the Ground No.7.1 i.e. whether interest receivable on outstanding is an international transaction or not. 9. After considering the rival submissions, we observe that so far as the issue of adhoc disallowances on employee training expenses and printing and stationery expenses are concerned, the assessee has submitted before the DRP as under : 10.2 In this regard, the assessee humbly submits that the employee training expenses constitutes a minor proportion of the total Other expenses incurred by the assessee (Refer Note 28 of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ginal percentage increase in these expenses as compared to last year. Considering the above-mentioned facts, the claim of the Ld. AO that the expenses were exorbitant, was arbitrary and without any basis. 10.4. Further, the Assessee would like to submit before your kind Honour that the Ld. AO, on one hand has examined the increase in employee training expenses as discussed above, however the Ld. AO failed to appreciate the fact the there was corresponding increase in turnover and profit of the Assessee as well, which is explained in the below mentioned table: (Amount in INR Lakhs) Sl. No. Particulars A.Y. 2018-19 A.Y. 2017-18 1 Total revenue from operations 126,200.12 117,582.70 2 Total profit (after tax) 14,065.70 12,587.47 3 Percentage in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... axes to the exchequer . 10. We observe that DRP while deciding this issue against the assessee has not at all discussed these arguments in its order and has simply gone away by observing that the assessee had failed to submit necessary documentary evidence, which in our view, is not correct for the reason that there is corresponding increase in revenue from operations as well as profits of the impugned year and hence without appreciating this aspect the ad hoc disallowances are legally not permissible. Therefore, we restore this matter to the AO for deciding afresh considering all the main and alternative arguments of the assessee. 11. In ground number 5 the grievance of the assessee is that the AO despite the directions of Ld DRP has not c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pra), the co-ordinate bench in para 16 held as under : 16. We have heard the rival contention and also gone through the records in the light of the submissions made on either side. In the case of PCIT Vs. Tecnimont (P) Ltd. (2018) 96 taxmann.com 223 (Bombay) for the A.Y. 2009-10, Hon'ble Bombay High Court held that interest chargeable on delayed recovery of export receivables from AEs should be taken at LIBOR rates for determining ALP of notional interest on delayed recovery. Respectfully following the same, we are of the considered opinion that the ends of justice would be met by accepting the interest rate at LIBOR +200 points. We direct the Ld. Assessing Officer to adopt the same. Therefore, this ground of the assessee is allowed in ..... X X X X Extracts X X X X X X X X Extracts X X X X
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